Friday, October 30, 2015

The lowest-cost bronze plans available on HealthCare.gov will see their premiums jump by an average of 12.7% in 2016, an IBD analysis reveals. On top of that, deductibles for the cheapest plans will rise by an average $420, or 7.4%, to $5,653.

The one-two punch of double-digit premium hikes and out-of-pocket cost jumps reflects the difficulty of providing affordable coverage to enrollees who, many insurers have said, are using more care than expected.

These data reflect the change in premiums before any government subsidy. So far, about 85% of those buying coverage via HealthCare.gov get subsidies to help pay for premiums, but millions more buy the same ObamaCare-compliant plans outside the exchange.

And if coverage gets too expensive for the unsubsidized, more relatively young and healthy people in the middle class may opt out, leading to further premium hikes.

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Where Fines Look Good

Once subsidies are factored in, a 30-year-old earning 257% of the federal poverty level ($30,000 in 2015; $30,250 in 2016) will see a 4% rise in the cost of the cheapest bronze plan.

But the tame average obscures some hefty increases and potential problems below the surface. Ten of the 37 metro areas examined saw after-subsidy hikes of more than 10% for the cheapest bronze plan.

An even bigger concern — both for the exchanges and those who have to buy coverage or pay a fine — is how much more bronze plans cost compared to the penalty for young adults with modest incomes.

For a 30-year-old who earns $30,250 next year, the three HealthCare.gov markets examined will be Miami, Atlanta and Jackson, Miss.

In each of those markets, such an individual would owe $2,220 a year for the cheapest policy. Given that those plans — all from Centene (NYSE:CNC) affiliate Ambetter Health — also come with $6,800 deductibles, the $695 tax penalty for not having any coverage may look like a good option.